In the UK, penny shares are generally considered to be those priced below £1, and in smaller companies with market-caps of less than £100m.
The market-cap rule can be flexible, but today I’m looking at three that strictly fit the categorisation. And I’m wondering if any if them might be good to buy in December, and could have a positive 2023 ahead of them.
As a general caution though, low-priced shares in very small companies can be volatile, so there’s extra risk here. I’d only consider buying them as a small part of a diversified stock portfolio.
Helium
Helium One Global (LSE: HE1) shares have been picking up in November.
After getting drilling back on track in Tanzania, the company is aiming for spudding at its Rukwa licence in the first quarter of 2023. So that’s what I reckon could drive the share price as we reach the end of 2022.
Helium has been increasing strongly in price over the past few years, as industry demand has outstripped supply growth. So a positive result might give the stock a boost. Conversely, a failure could send the shares plunging, and drive the company back below its £54m market-cap.
Helium One is also not yet profitable, so there’s added risk there. But I think it could be one to watch.
Real estate
The real estate business is in the dumps. And that makes me think Capital and Regional (LSE: CAL) might make a timely buy.
The real estate investment trust (REIT) invests in UK retail and leisure properties, including shopping centres. And with recession and inflation in double digits, it’s no surprise that the stock has performed poorly in 2022. Following on from the pandemic devastation, we’re looking at an 89% drop over five years.
But dividends were resumed this year after being suspended in 2020. The 2.5p interim for 2022 was only modest, though it’s a start. And the shares picked up in November.
There’s still huge uncertainty facing the REIT market at the moment, and we could be in for a couple more rocky years. But if 2022 has been a time of maximum pessimism, I wonder if 2023 might prove brighter?
Recruitment
Shares in recruitment specialist Staffline (LSE: STAF) have continued their decline through 2022.
The dangers to the business posed by the UK’s economic troubles seem clear enough, even if the first half looked reasonably steady. The firm saw a positive, if modest, underlying profit in the period. That did though translate to a small reported loss. And the balance sheet slipped to £13.9m net debt.
Whether Staffline is a good investment for 2023 will surely hinge on how the second half has gone. And to hear about that, we’ll need to wait for a trading update due on 25 January.
I think it might need bold nerves to take the risk of buying in December. But the share price has been regaining ground of late. And company directors have been buying.
